Urgency Grows to Avoid U.S. Debt Crisis, Reopen Government

WASHINGTON—The Senate's top Democrat and Republican opened negotiations on Saturday aimed at avoiding a U.S. debt crisis and reopening the government, marking a new chapter and new urgency in efforts to resolve the political stalemate in Congress.

The talks between Senate Majority Leader Harry Reid (D., Nev.) and Minority Leader
Mitch McConnell
(R., Ky.) were their first face-to-face negotiations since the government shutdown began on Oct. 1, and showed a changed dynamic in the Capitol. House Republicans, a dominant force in budget battles, have been sidelined after withdrawing many of their policy demands, only to see President
Barack Obama
reject their proposal for ending the impasse.

ENLARGE

House Speaker John Boehner, shown with Rep. David Schweikert (R., Ariz.), met with fellow Republicans Saturday in a closed-door meeting.
Associated Press

Budget Battle

Instead, the focus has turned to the Senate, where members of both parties had started talks in recent days on a compromise proposal, before discussions were elevated to Messrs. Reid and McConnell on Saturday.

"The real conversation that matters now is the one that's taking place between McConnell and Reid," said Sen.
Bob Corker
(R., Tenn.).

The two Senate leaders met around 9 a.m. on Saturday for about 45 minutes, along with Sens.
Charles Schumer
(D., N.Y.) and
Lamar Alexander
(R., Tenn.). Mr. Reid said Mr. Alexander called him on Friday night to initiate the talks at Mr. McConnell's request.

"This should be seen as something very positive, even though we don't have anything done yet and a long ways to go before anything like that will happen," Mr. Reid said Saturday afternoon.

Senate Democratic leaders met for about an hour and a half with the president and his top aides to discuss strategy for the negotiations. Also attending the meeting were White House Chief of Staff
Denis McDonough,
deputy staff chief
Rob Nabors,
and Sylvia Mathews Burwell, director of the Office of Management and Budget.

The talks came against a backdrop of rising public frustration with the partial government shutdown, now in its 12th day, and market anxiety about the prospect of a U.S. debt default. The Treasury says that by Thursday it will have exhausted emergency measures and be left with only about $30 billion to pay the nation's bills, which could run out in a week or two.

Senate leaders gave no firm deadline to reach a deal, but said they hoped to resolve the situation over the next two days. They made clear they were aware that the uncertainty shrouding the debt ceiling could worry investors when the market reopens Monday.

"We don't know when the market will react to this," Mr. Schumer said.

Senate leaders were still working Saturday to reach an agreement on the biggest questions underpinning any deal to reopen the government and raise the debt ceiling, aides said. Lawmakers must decide how long to reopen the government and at what spending level, as well as how long to extend the country's borrowing limit.

Democrats don't want to agree to a plan that keeps the government running for an extended period that locks in a set of across-the-board cuts known as the sequester, Mr. Schumer said.

Any deal that the Senate settles on is sure to present a quandary to conservative House Republicans: It is likely to fall short of the policy demands they have been seeking, but will likely arrive shortly before Oct. 17, leaving little time for further negotiations.

In the Senate, Democratic leaders rejected a proposal from one of the chamber's least-conservative Republicans, Sen.
Susan Collins
of Maine, that had appeared to be gaining momentum, drawing interest from some Democratic senators.

The Collins plan called for extending the nation's borrowing authority through January and opening the government through March. But the measure would have done nothing to undo the sequester, a top Democratic priority. It also would have repealed a tax on medical devices imposed under the 2010 federal health law, a proposition Republicans favor but many Democrats don't.

After Democrats on Saturday rejected the Collins plan, attention shifted to the bipartisan negotiations between the top party leaders.

"What I hope is that Sen. McConnell and Sen. Reid will work together to come up with a way for us to open the government and pay our bills and reduce our debt," said Mr. Alexander. "If they can do that over the next few hours, the country will be better off."

Many House lawmakers have left Washington for the weekend, a further indication that the Senate was building the likeliest avenue toward a resolution. They return for votes on Monday evening.

Conservative lawmakers were already bracing Saturday for a Senate proposal they would find disappointing, if not unacceptable. To many, the Collins plan was insufficiently conservative, and the talks between Messrs. Reid and McConnell seemed likely to move it further toward Democratic policy goals.

When House Republicans heard details of the Collins proposal in Saturday's meeting, there were "a lot of nods of agreement and understanding that this is a bad idea," said Rep.
John Fleming
(R., La.). "It's a nonstarter with us. We'd never go along with that."

Also Saturday, a bill to extend the country's borrowing limit through the end of 2014 failed in the Senate on a procedural vote that fell along partisan lines. Republicans were unlikely to back the measure while their top party leaders were in negotiations on the debt ceiling, and no GOP senators voted for it.

The measure to raise the debt ceiling, which included no other policy proposals, fell short of securing the 60 votes required to open debate on it, failing to advance on a 53-45 vote. Mr. Reid voted against the measure for procedural reasons, which leaves the option of bringing the measure to the Senate floor in the future.

House Republicans learned on Saturday that Mr. Obama had rejected their proposal for ending the stalemate. They painted a far more negative picture of the state of their talks with the White House than had emerged on Friday, when the White House had said Mr. Obama "had some concerns'' about the plan but that the two sides would keep talking.

On Saturday, GOP lawmakers and aides said Mr. Obama had essentially rejected everything offered by House Republicans in their proposal.

"I am disappointed the president has rejected the offer that we put on the table," said House Majority Leader
Eric Cantor
(R., Va.). He added: "He's trying to see which Republican senator he can pick off in the Senate. I hope that the Senate Republicans stand strong so we can speak with one voice."

House Republicans had told Mr. Obama on Thursday that they were willing to extend the nation's borrowing authority for six weeks and begin talks to reopen the government in exchange for the start of negotiations on broader fiscal issues in which the GOP would press for a range of deficit-reduction steps and changes to the health-care law, according to a House GOP aide.

That proposal marked a major concession from House Republicans, who only weeks ago had been aiming to use the political stalemate as leverage to undermine Mr. Obama's signature legislative achievement, the 2010 health-care law. They also appeared to step back from a demand that any increase in the debt ceiling be paired with deficit-cutting measures.

On Saturday, some House Republicans said they still wanted any agreement to include changes to the 2010 health law, a top priority that had given way among Republicans in recent days in favor of attempts to win deficit-reduction measures.

They were disappointed that Senate Republicans were considering funding the government through March, rather than for a shorter period.

"It's a huge cave," said Rep.
Patrick McHenry
(R., N.C.). Reopening the government for six months would remove "the forced element of negotiations, and allows most of the Obamacare provisions to go into effect without us having any ability to negotiate," he said.

Federal agencies were forced to suspend many activities and place hundreds of thousands of workers on furlough on Oct. 1, the start of the fiscal year, after Congress failed to pass a bill to fund the government.

Public frustration with the stalemate has been high, opinion polls show, and markets are wary. The Treasury says lawmakers must lift the debt ceiling this month, or it will be unable to pay all the nation's bills. A landmark comes on Thursday, the date by which the Treasury says it will have exhausted emergency measures and be left with only about $30 billion to pay bills, which could run out in a week or two.

Democrats are a mostly a lost cause. It is precisely their failure in real life that led them to such a desperate situation to vote for the fools promising them to redistribute to them somebody else's private property. Imagine expecting thieves to hand over the loot without taking the lion's share of stolen booty for themselves!!! Under such impaired thinking any kind of psychotic and manic episodes are possible leading to the WORST decisions possible.

Producers have taken note of the psycho knife-wielding Demo-socialists slashing at the air with white foam frothing out of their mouths. These producers are fleeing to safety into their safe houses until the rabid slashers render themselves flaccid into exhaustion. Better days will emerge once the foam subsides.

Keep it shut down forever. The federal government is a bloated, beached whale that is smelling up the country.

National debt is $17 TRILLION, that's over $53,000 for every man, woman and child in the USA. Unfunded liabilities are estimated to be any where between $60 TRILLION and $85 TRILLION. So those of you who want to continue this financial madness need to decide what you're going to tell your children and grandchildren about why we are unloading this massive burden to them.

Blaming President Obama for the debt is like taking gasoline and a match to your own house, then shifting the blame to the one who put out the fire. In essence, condemning the one who doused the fire for running up the water bill, when his only other option was to let the house burn to the ground. This is particularly amusing seeing that two thirds of the debt still belongs to Republicans, even after President Obama's emergency spending to avoid the second great depression they put us in danger of. But silly me; facts mean nothing to the Baggers because Obama's Black - and that's all they see.

With Congress insisting that our nations debts and the payment of said debts remain a part of their budget negotiations, aren't they in direct violation of the Constitution of the United States?

If Congress fails to take steps to make sure the national debt is paid, they have failed to uphold their sworn oaths of office.

Isn't that treason?

The budget needs to be reigned in, but no one in Congress or the Obama Administration has the authority to directly violate the Constitution of the United States by not paying our national debts.

Congress as the sole Constitutionally authorized branch of our government to spend tax payer funds, holds the sole responsibility of the National debt and budget mess we are in today.

If Congress allows the country to come to the brink of default on the National debt, shouldn't the Treasury be authorized to take whatever measures necessary to prevent Congress from violating our Constitution?

Additionally, the government needs to be reopened, because they are in effect failing to uphold their oath to the American people by shutting down a government that belongs to us and are immediately harming our country.

Many users of the federal exchange were stuck at square one. A New York Times researcher, for instance, managed to register at 6 a.m. on Oct. 1. But despite more than 40 attempts over the next 11 days, she was never able to log in. Her last attempts led her to a blank screen.

In the end, both sides will have to agree to agree. They will open the government for a short time, raising the debt ceiling for perhaps 3 months and agree on the framework of the talks for cutting the deficit.

Urgency? Yea, we live in a time when we can satisfy all our urges.....care of the government who will gladly pay you not to work or care....so you can satisfy those .....urges. So we HAVE to borrow more money so people can have their ....rights. The only REAL urgency I see here is the pols urgency to continue to buy elections.

"This business will get out of control. It will get out of control and we'll be lucky to live through it."

They don't know what will happen as the cliff approaches, and the momentum just might throw us (hopefully) off the cliff even if we get a pre-manufactured ersatz deal at the last minute.

The good news is that the GOP knows it will be history if they give in to Obama.......the GOP is motivated, because the Tea Party gave the GOP the same incentive as Conquistador Cortez did for his troops when he arrived to the new world: When he reached the New World, Cortez burned his ships. As a result his men were well motivated!

The GOP is history if they fail. That's the best motivation for these lazy, greedy politicians. Give in, and no more retirement or living off the teat provided by Joe Six Pack. No more good, easy life.

Yes Bob, most Western Countries have had universal healthcare for over the last 30 years ,what amazes me is that our Aust health care cost over 100% less expensive, despite the US lower cost of living ,we even have people with Private Health cover using our Public Hospital systems ,because of the high quality of care from World leading medico's ,like http://www.ddms.com.au/professor-david-david/ who even provides free services to poor people across the World,other like this foundation http://www.hollows.org.au/ who has restored sight to ten of thousands of poor people in the World .

Right now we have new $2bn Public hospital under construction in my home State of Sth Aust--private funding.

Where is all the money going in the US ,who is ripping off your health system?

I wonder if Harry requires Mitch to drop his pants before he's allowed to come in to Harry's chambers.

While Harry's giving Mitch his spanking, the great New York patriot Schumer is out doing everything he can to spook the markets and threaten 401K's. By the time Harry and Chucky are finished , they will have a lot more of us shuffling with our pants around our ankles and our wallets gone.

Confidential progress reports from the Health and Human Services Department show that senior officials repeatedly expressed doubts that the computer systems for the federal exchange would be ready on time, blaming delayed regulations, a lack of resources and other factors.

Deadline after deadline was missed. The biggest contractor, CGI Federal, was awarded its $94 million contract in December 2011. But the government was so slow in issuing specifications that the firm did not start writing software code until this spring, according to people familiar with the process. As late as the last week of September, officials were still changing features of the Web site, HealthCare.gov, and debating whether consumers should be required to register and create password-protected accounts before they could shop for health plans.

Mr Eric Cantor can learn to work better with his peers in Congress and in particular representatives of Democrats in Congress...,stop undermining them and the Senate by going directly to the President...,In the alternative, Eric Cantor can take some training in administrative process and be more mindful of his station....,this nature and extent of ignorance at the pillar of government is unacceptable.

It is a long road from Congress, to the Senate and ultimately to the President of the United States...,Mr Cantor seems used to getting his way by undermining his peers...,it just does not work that way...,,

I find the whole Tea Party thing incomprehensible. The Germans went off the rails in the 1930s, but that followed a lost world war, hyperinflation and massive unemployment. Of course that doesn't excuse anything, but you can see how they'd become alienated from ordinary politics. But where are the parallel traumas here? The horror of paying for somebody else's health insurance? Really, what's eating these people?

As a senator, Mr. Obama opposed raising the debt ceiling and cited the negative consequences of debt on future generations. Yet, as president, he has increased the debt by trillions and has take no action to meaningfully reduce annual deficits. Consequently, in a few years, annual interest payments on the debt will exceed all discretionary nondefense (and defense - but not combined total) spending (education, transportation, etc.). Given inflation, wage increases, etc., the amount available for programs will be constrained and Mr. Obama will have achieved those negative consequences for future generations.

The claim that there can be negotiations is not supported by the Obama administration's track record. The recommendations of the Simpson Bowles commission (appointed by Mr. Obama) failed. Previous negotiations (e.g., so called gang of 6 in Senate) have not brought any resolution. Without agreement, negotiations are just a means to kick the can further down the road (as a candidate in 2008, Mr. Obama decried this process).

The Republicans in the House over reached -- controlling half of 1 branch of government limits ones powers. Gaining control of the Senate and the White House allows for major changes. They actually have helped obamacare -- by diverting attention to the shutdown/debt ceiling, there is less focus on all the problems: from technical glitches to people paying more (despite promises to the contrary) to people losing their previous coverage (contrasted to Mr. Obama's commitment), to companies cutting employment or hours due to obamacare. Talk about shooting yourself in the foot.

"Ronald Reagan, an icon to both sides in this fight, said to GOP volunteers in 1967: "There is room in our tent for many views. It is not your duty, responsibility or privilege to tear down or attempt to destroy others in the tent." "

For the past 12 days, a system costing more than $400 million and billed as a one-stop click-and-go hub for citizens seeking health insurance has thwarted the efforts of millions to simply log in. The growing national outcry has deeply embarrassed the White House, which has refused to say how many people have enrolled through the federal exchange.

Even some supporters of the Affordable Care Act worry that the flaws in the system, if not quickly fixed, could threaten the fiscal health of the insurance initiative, which depends on throngs of customers to spread the risk and keep prices low.

“These are not glitches,” said an insurance executive who has participated in many conference calls on the federal exchange.

On October 17 at last possible moment the Fed will step in and forgive a portion of the $2 trillion of Treasury securities that it holds thus avoiding default by creating funds with a computer click. The $ will then begin to plunge. What's your poison?

It's like a bad movie - everybody knows how it will end, the government will re-open, the debt ceiling will be raised and the parties will agree to review "possible" budget cuts which of course will go nowhere since the Dems will want to slash defense spending and the Rep will push to dump Obamacare.

This is why I am so pessimistic about the future..I think we have crossed the tipping point and are now living in a country where more than half of the population have pillowcases in their hands and are out looking for "candy." Unfortunately, there's no ability to turn off the porch light when Uncle Sam has his foot in your front door.

James, I actually found an article from earlier in the week on our local TV's website that CIGNA has pulled out of the exchanges because their math, and the administration's math, regarding subsidies isn't coming out the same. This is way more than a computer glitch. The amazing thing is that Sebelius and the president were both so confident that they had this thing "in the bag"....It's in the bag alright, the one they make available on airplanes.

President Obama likes to say that raising the nation’s borrowing limit “won’t add a dime” to the federal debt, but he neglects to mention that the government already has borrowed the equivalent of more than 60 trillion dimes since he took office.

When Mr. Obama became president in January 2009, the total federal debt stood at $10.6 trillion. This week, it hit $16.7 trillion — an increase of 57 percent. In the same time frame under President George W. Bush, total federal debt rose 38 percent. Under President Clinton, it rose 32 percent.

The flaws in the law have been there since it was passed - even if Ms. Pelosi famously didn't read it. Personally, given the impossibility of repeal, I would have preferred that my party had worked on pointing out the flaws rather than immolating itself on the repeal issue. Would that have addressed the central flaw of Obamacare? No. But it would have established a record of opposition and allowed the party to address other pressing issues such as tax reform, spending, entitlement reform that are equally important and have avoided the corner into which the House leadership has painted itself.

Most young adults have not yet realized that they will be forced to buy overly expensive health insurance to pay for those with pre-existing conditions....or face a government fine that grows every year.

Agreed, Don. This whole proposal to re-open the government and increase the debt ceiling with a promise to review spending and look for reductions/reforms is basically the same as the last go-around, when the so called "Gang of Six" convened to generate recommendations that went absolutely nowhere.

Yes Frederick, just read my post carefully, you go to a Public Hospital in Aust its free,and the care there is amongst the best in the World,yes we can take up Private cover for better levels of service and choice of Private Hospitals in a lot of cases the Public Hospitals are more comprehensive in the range of immediate services like emergencies 24/7 and many cases have some the Worlds leading medical specialist who are not in it for the money.

We need to take the lead on the mandatory social spending cuts that caused the debt to increase. It should not matter that the constituencies won't like it. Our leaders are too caught up with the other side going first because (even) the tea party has balked at such action. Given the current situation, the constituencies will go along if the communication is succinct and to the point.

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